(MAC Nos.841/2020 & 842/2020) CGHC010142682020 2026:CGHC:32059 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR MAC No. 841 of 2020 {Arising out of award dated 1-2-2020 passed by the Motor Accident Claims Tribunal, Korba in Motor Accident Claim Case No.17/2018} National Insurance Company Limited, through Branch Manager, National Insurance Company Limited, Office – Shop No.13, Minu Complex, Kosabadi, Korba, Tahsil and District Korba, Chhattisgarh. (Insurer) (Non-Applicant No.3) --- Appellant versus 1. Smt. Savitri, Wd/o Late Khemlal Banjara, aged about 40 years. 2. Sanjay Kumar, S/o Late Khemlal Banjara, aged about 19 years. 3. Sangeeta, D/o Late Khemlal Banjara, aged about 17 years. 4. Sharda, D/o Late Khemlal Banjara, aged about 14 years. 5. Pooja, D/o Late Khemlal Banjara, aged about 14 years. 6. Pushpa, D/o Late Khemlal Banjara, aged about 12 years. No.3 to 6 minor, through natural guardian mother Smt. Savitri, Wd/o Late Khemlal Banjara. 7. Jamuna Bai, W/o Dukal Singh, aged about 65 years. 8. Goverdhan, S/o Khemlal, aged about 22 years. All R/o Village Botli, Police Station Kartala, Tahsil and District Korba, Chhattisgarh. (Claimants) SISTA SOMAYAJULU Digitally signed by SISTA SOMAYAJULU Date: 2026.07.28 16:52:48 +0530 (MAC Nos.841/2020 & 842/2020) 9. Mohammad Ali, S/o Mouddin, R/o Tatibandh, Raipur, Tahsil and District Raipur, Chhattisgarh, Presently residing at Faridnagar, Bhilai, Police Station Supela, District Durg, Chhattisgarh (Driver of vehicle) 10. Vikash Tiwari, S/o U.S. Tiwari, R/o House No.B.K.-22, Plot No.2, Nehru Nagar (E), Bhilai, District Durg, Chhattisgarh. (Owner of Vehicle) --- Respondents AND MAC No. 842 of 2020 {Arising out of award dated 1-2-2020 passed by the Motor Accident Claims Tribunal, Korba in Motor Accident Claim Case No.18/2018} National Insurance Company Limited, through Branch Manager, National Insurance Company Limited, Office – Shop No.13, Minu Complex, Kosabadi, Korba, Tahsil and District Korba, Chhattisgarh. (Insurer) (Non-Applicant No.3) --- Appellant Versus 1. Smt. Amrit Bai, Wd/o Late Paras Banjara, aged about 45 years. 2. Sunita, D/o Late Paras Banjara, aged about 24 years. 3. Sunil, S/o Late Paras Banjara, aged about 22 years. 4. Anil, S/o Late Paras Banjara, aged about 20 years. 5. Anita, D/o Late Paras Banjara, aged about 18 years. 6. Ashish, S/o Late Paras Banjara, aged about 16 years (minor) through natural guardian mother Smt. Amrit Bai, Wd/o Late Paras Banjara. 7. Prembai, Wd/o Late Siyaram Banjara, aged about 65 years. All are R/o Kuwabhattha, Chowki Mankpur, Tahsil and District Korba, Chhattisgarh. (Claimants) 8. Mohammad Ali, S/o Mouddin, R/o Tatibandh, Raipur, Tahsil and District Raipur, Chhattisgarh, Presently residing at Faridnagar, Bhilai, Police Station Supela, District Durg, Chhattisgarh. (Driver of Vehicle) (MAC Nos.841/2020 & 842/2020) 9. Vikash Tiwari, S/o U.S. Tiwari, R/o House No.B.K.-22, Plot No.2, Nehru Nagar (E), Bhilai, District Durg, Chhattisgarh. (Owner of Vehicle) --- Respondents For Insurance Company : Mr. Qamrul Aziz, Advocate. For Claimants : Mr. Aditya Khare, Advocate. Single Bench:- Hon'ble Shri Justice Sanjay K. Agrawal Judgment on Board 27/07/2026 1. Since common question of facts and law are involved in both the above titled appeals filed in terms of Section 173 of the Motor Vehicles Act, 1988, they have been clubbed together, heard together and are being disposed of by this common judgment. 2. Mr. Qamrul Aziz, learned counsel appearing on behalf of the appellant herein/Insurance Company, would make solitary submission that since the policy was cancelled vide Ex.D-1 and cancellation of the same has duly been intimated to the owner of the vehicle, the Insurance Company is not responsible, as the cheque has already been dishonoured. 3. Mr. Aditya Khare, learned counsel appearing on behalf of the claimants, would support the impugned awards and oppose the appeals and submit that the Claims Tribunal in para 19 of its judgment has clearly recorded a finding that intimation regarding cancellation of policy was never given to the owner of the vehicle which the officer of the Insurance Company has admitted in his statement before the Tribunal and as such, the Insurance Company (MAC Nos.841/2020 & 842/2020) has rightly been fastened the liability to pay the amount of compensation to the claimants. 4. I have heard learned counsel for the parties and considered their rival submissions made herein-above and also gone through the record with utmost circumspection. 5. The law in this regard is well settled by their Lordships of the Supreme Court in the matter of United India Insurance Company Limited v. Laxmamma and others1 in which it has been held as under: - “26. In our view, the legal position is this: where the policy of insurance is issued by an authorised insurer on receipt of cheque towards the payment of premium and such a cheque is returned dishonoured, the liability of the authorised insurer to indemnify the third parties in respect of the liability which that policy covered subsists and it has to satisfy the award of compensation by reason of the provisions of Sections 147(5) and 149(1) of the MV Act unless the policy of insurance is cancelled by the authorised insurer and intimation of such cancellation has reached the insured before the accident. In other words, where the policy of insurance is issued by an authorised insurer to cover a vehicle on receipt of the cheque paid towards premium and the cheque gets dishonoured and before the accident of the vehicle occurs, such insurance company cancels the policy of insurance and sends intimation thereof to the owner, the insurance company's liability to indemnify the third parties which that policy covered ceases and the insurance company is not liable to satisfy awards of compensation in respect thereof. 27. Having regard to the above legal position, insofar as the facts of the present case are concerned, the owner of the bus obtained the policy of insurance from the insurer for the period 16-4-2004 to 15-4-2005 for which premium was paid through cheque on 14-4-2004. The accident occurred on 11- 5-2004. It was only thereafter that the insurer cancelled the insurance policy by communication dated 13-5-2004 on the 1 (2012) 5 SCC 234 (MAC Nos.841/2020 & 842/2020) ground of dishonour of cheque which was received by the owner of the vehicle on 21-5-2004. The cancellation of policy having been done by the insurer after the accident, the insurer became liable to satisfy the award of compensation passed in favour of the claimants.” 6. In the instant case, cheque was dishonoured on 24-10-2017 after issuance of policy on 17-10-2017 and the accident occurred on 26-12- 2017 and the policy is said to have been cancelled on 24-10-2017 which was allegedly intimated to the owner of the vehicle by Ex.D-5, however, no document has been filed demonstrating that intimation regarding cancellation of the policy was sent to the owner of the vehicle by registered post or otherwise. Officer of the Insurance Company Sudhir Wagh (NAW-1) has admitted in his statement before the Claims Tribunal that the Insurance Company has not filed any document showing that intimation of cancellation of policy has been communicated to the owner of the vehicle. As such, it is quite vivid that no document has been filed demonstrating intimation of cancellation of policy of the offending vehicle to its owner. Therefore, the Insurance Company is liable to pay the amount of compensation as held by their Lordships of the Supreme Court in Laxmamma’s case (supra) and liability has rightly been fastened upon it. I do not find any merit in these two appeals, they deserve to be and are accordingly dismissed. No order as to costs. Sd/- (Sanjay K. Agrawal) Judge Soma